Insolvency statistics for Q3 2023 released this week show that overall, company failures are 10% higher than in the same period in 2022. The construction industry…
The latest sector breakdown of corporate insolvencies was released earlier this week, so here is my updated chart of insolvencies by sector for both November 2021 and the total for the year.
My three key highlights from the November breakdown:
- Construction sector insolvencies soared to their highest level since monthly sector breakdowns were reported, with 325 in the month, topping the previous high of 315 in January 2019
- Art, entertainment and recreation sector insolvencies also rose to their highest level since monthly breakdowns were reported, with 49 insolvencies in November, topping the previous high of 44 in August 2020
- Insolvencies in the accommodation and food service sector rose back to their pre-pandemic levels, which is worrying when you consider what the impact of Omicron on the busy festive period could mean for insolvencies in the sector in future months
All three of these sectors continue to face significant challenges, be it supply chain constraints and shortages in construction or restrictions on events and gatherings impacting both the arts and hospitality sectors. Then add to this the surging inflation and cost of living squeeze for individuals, which will have a big impact on discretionary expenditure in these sectors.
These may not show up on the December sector breakdown once released but it is definitely something to look out for in the 2022 figures.
Looking ahead to the December 2021 figures, which are due out in early February, it seems highly likely that once again the top sectors in terms of insolvencies for the year will be Construction, Retail/Motor trade and Hospitality, which is not surprising given the challenges these sectors have faced and continue to face.
If you or your clients’ businesses are struggling financially then early advice greatly increases the prospects of a successful rescue or turnaround avoiding the need to close your business. PKF Francis Clark offers a free initial meeting to assess the options available to you, and if you would like to discuss these in more detail please contact a member of the Business Recovery team.